UPS set for billion dollar expansion in Europe
13 / 04 / 2015
United Parcel Service (UPS) looks set to invest €1bn in its European business in order to expand its package delivery network.
The unconfirmed UPS plan, reported by German magazine Wirtschaftswoche, comes less than a week after arch US parcel rival FedEx said it was going to buy Europe’s TNT Express for $4.8bn, subject to regulatory approvals.
"We will strongly expand our network in Germany and the rest of Europe," the magazine quoted UPS Germany chief Frank Sportolari as saying, adding that the number of parcel shops and sorting centres would rise with the investment.
Sportolari said that UPS "has lost time" after its own attempt in 2013 to take over TNT was blocked by European regulators due to concerns it would restrict competition.
TNT Express’ European ground delivery network is seen as a key attraction for US-based FedEx, which will have to dispose of the Dutch operator’s freighter airline due to European Commission rules on majority foreign ownership of European Union airlines.
TNT chief executive Tex Gunning anticipated that the European road network created by the FedEx takeover “would be the envy of the industry.”
FedEx has already identified potential purchasers of TNT Express’ air operations, says FedEx chief executive David Bronczek.
The reduced operational overlap between FedEx and TNT Express was reflected in last week’s bid of €8 per share, compared with the €9.50 that UPS had been prepared to offer.